State tries to encourage turnover in public housing

New policy will gradually raise rent to 70 percent of market value over 5 years

Posted: November 5, 2013 - 12:01am

THE ASSOCIATED PRESS

ANCHORAGE — State officials are trying to increase turnover in public housing.

Beginning in 2014, able-bodied renters in subsidized apartments will have five years to transition out of public housing in a push to get them to become self-sufficient, The Anchorage Daily News reported Saturday.

During the first year, rent will drop slightly, from 30 percent of a person’s income to 28.5 percent.

But after that, the monthly cost will shift to a percentage of the unit’s market value, rather than of the renter’s income. The percentage that renters have to pay will increase annually over the five years, eventually covering 100 percent of the cost.

The policy shift has been in the works since 2008. State officials said the income-based system was discouraging renters from becoming self-sufficient because the more they earned at work, the more they had to pay for their apartments.

“Sometimes there’s not a lot of motivation to make more money because you feel like you’re just going to pay more money in rent,” said Cathy Stone, director of public housing with Alaska Housing Finance Corp. “So why would you work more when you would just pay the same if you don’t work?”

The elderly and disabled are not being pressured to find work or stop receiving public housing. They will be getting notices on Monday that their rent is dropping from 30 percent of their income to 28.5 percent, but they’ll also now be responsible for paying their own utilities.

Bryan Butcher, chief executive director of Alaska Housing, said that in 2003 the average family stayed in public housing for three years. Now, it’s about eight. For every unit of housing, there are four other families waiting for assistance. In Anchorage, the estimated wait for a one-bedroom unit is more than 40 years, according to Alaska Housing.

“We’ve got thousands of needy families sitting on our waiting list that we’re unable to accommodate because we have a finite number of vouchers and units,” Butcher said. “In the near term, these families don’t have a lot of chance of getting help from Alaska Housing because there hasn’t been the kind of work-through in units that we used to see in the past.”

The shift is part of the federal demonstration housing program, Moving to Work, that Alaska joined in 2008. The state has traditional housing projects owned by the government, as well as privately owned apartments for which low-income renters receive government vouchers covering a portion of the rent.

In Anchorage alone, there are nearly 3,000 households with subsidized rent and more than double that number on the waiting list. There are 693 public housing units available in Anchorage and about 2,075 units for housing vouchers, according to Alaska Housing spokeswoman Stacy Schubert.

Starting the second year, renters will pay 40 percent of the market-value rent and receive a 60 percent subsidy. By year five, households will pay 70 percent of rent and the government will pay 30.

To ease the rent transition, tenants will be required to complete a course in financial literacy offered by the agency during the first year.